Art of Accounting: Taking your practice to next level

I get emails and calls from 30 to 40 colleagues a month. Many can now be answered by sending an article I have written. When I receive bunches of questions on the same topic, I’m alerted to nascent issues, and while many are “new” to the sender, they are things I tackled quite some time ago. An example is last week’s column about a succession planning exit strategy. That was first presented by me in a speech over 30 years ago. The beauty of having a body of work is that it remains on my radar and can easily and continuously be updated as circumstances develop or change. To be frank, my original opinion about that exit strategy has not changed much. 

Another thing that has not changed much is my suggestion presented in today’s column on how to take your practice to the next level. Both of these issues are “opposites” since what I suggest does not work for an exit strategy but does work if you want to grow your practice to the next level.

A typical call I’ve received about this comes from someone who has built an incredible practice and now is totally overloaded with supervising the practice and performing the top-of-the-line services many clients seem to always need. I spoke recently with solos who have 10, 15 and 20 staff members. None of these practices had people who could step up to the next level. That is what prompted this column today. The following are some suggestions I presented:

For immediate “aspirin relief” I suggest identifying two current staff people with the potential to move up. In all cases it’s staff with a maximum of four years’ experience, along with someone with about a year’s experience. I suggest that the person with the greater experience should be asked to help out and review some completed work from other staff on two or three clients. Ask this person to look over the work, saying that you are totally jammed up on a special engagement and would not be able to work on it right away. When that was completed, the owner could give it a quick look-see and then use it to call the client.

After this was done three times in about a week, they should have a pretty good idea if this could be done more often. If it was not done well, then nothing much was lost, and they could forget about that. If done well, then that staff person should continue reviewing work instead of the owner; and also spend some extra time mentoring or training the one-year person to get to the next level. 

If all goes well, there would be two rising stars to work with going forward. At the end of a year, the owner’s workload should be reasonably reduced. At the same time, the owner should pay particular attention to systematizing the processes. The time to work on the system would come from the time saved by these two staff members stepping up. That time is also an investment in making the practice into more of a business. The added delegation to those two should be eased into slowly. Perhaps an entry-level person should be added along the way.

There is no quick fix, no matter what you do, and a year’s investment to get the practice running with some supervisory people developed and with better systems is a big plus. The alternative to doing what I suggest is doing nothing. Figure it out!

The next step for a permanent solution is to bring in a high-level staff person or someone with a small practice looking to move up. This could be done along with or in addition to the “aspirin relief” plan. The high-level staff person could be someone with five years of experience, it does not need to be a 15-year person, but it could be.

You need to bring someone in with the present skills to handle your current client load and about a quarter of the special services you are performing. I make this a “must have;” otherwise you are hiring someone who did not grow where they were, and you will become their teacher to bring them to the level for which you hired them. In my opinion, many people who switch jobs often do not have the requisite skills to move up and help the owner move up. Instead, they both remain mired where they are at, and you will not get to where you want to be. 

Bringing in as a partner someone with a small practice and the available time and skills is a sensible solution. However, you then will have a partner you will need to answer to and will need to hope that they will not spend inordinate time on their existing client base. The goal is to relieve you of some of what you are doing so you can work more effectively and move toward your future. This decision might be the best because you will have an entrepreneurial partner who already knows much about managing a practice. 

Hiring someone is a big step, but if you realize early on that you’ve made a mistake, you could always let them go and start your search over with minimal costs or disruption. Merging someone in is a major decision and could become costly and even devastating if you select the wrong partner; while extricating yourself from the alliance could be difficult. That requires much more care and due diligence.

Quick fixes are when you settle and bring in someone who appears to be able to get the work done. They are people who are assigned past due, backlogged work that they can get completed and out the door, much to the relief of the owner. A problem with this is that there is virtually no supervision or management, and the work that’s pushed out of the way gets done by a staff person who was pushed out of the way. Now it is three or four months later and along the way this higher-level staff person has also been introduced to some clients and seems to be working out quite well.

The reality is that they learned nothing new from you — and nothing about your processes and procedures and possibly your quality control steps and culture — and are starting to become integrated into the practice. Unless they are an extraordinary person, they will not be your long-term solution. While you have relief from the cleaned-up work, you’ll likely be back where you started in a year to a year and a half. No forward movement. Growth needs deliberate onboarding, direction, management, oversight and adherence to systems. Quick fixes simply just do not work for a long-term growth strategy.

Merging upward is another way of growing your practice. In that situation you would be the person someone else is bringing in. An alternative is a merger with an equivalent-sized practice. For these you should reread the previous paragraph. This might not be what you want but might be the most practical solution. This, like everything else, needs a lot of care, consideration and soul searching about where you want to be and how you want to spend your time getting there.

Growing is difficult. Not growing could be more difficult. The first step is to decide where you want to be in five years and then set your sights on that and hope that you take the right actions and cut your losses as quickly as you can if you feel you made the wrong decision.

Do not hesitate to contact me at emendlowitz@withum.com with your practice management questions or about engagements you might not be able to perform.